KUALA LUMPUR (Sept 2): KBES Bhd’s wholly-owned Santero Sdn Bhd has been appointed as the sole distributor for Shanghai-listed Beiqi Foton Motor Co Ltd’s (Foton) products in Malaysia for 40 months.

In the announcement to Bursa Malaysia today, KBES, an express bus operator, said it received an approval letter from Foton today, after the signing of the vehicle distribution agreement with the Chinese auto player to appoint Santero as the sole distributor of Foton’s diesel- and natural gas-powered buses and coaches, including spare parts for the purpose of direct sales to the end-users or sales to the authorized wholesalers and/or retailers in Malaysia.

“Under this dealership arrangement, Santero will act as the sole distributor, whilst SuperCoach Assembly Plant Sdn Bhd, another wholly-owned subsidiary of KBES, will handle the assembly and fabrication of bodies for coaches and buses, and also the provision of related maintenance services for Foton,” KBES said in the filing.

The announcement confirms The Edge’s article on KBES, which said it would sign an agreement to assemble vehicles for both the domestic and regional markets.  

“The deal would drive revenue growth through product development and greater market penetration that is in line with its intention of assembling and distributing commercial vehicles and increase its market presence in the local vehicles industry,” it said.

KBES aims to establish Malaysia as an export hub for Foton in the ASEAN market, particularly Indonesia, for the export of Foton buses.

KBES also noted it would transform its Kamunting, Perak facility into a full-fledge assembly operation for Foton products, to facilitate transfer of know-how and development of localisation program that would benefit the domestic automotive industry.

Foton, which is part of the Beijing Automotive Industry Holding Co Ltd group, is an automotive player and largest commercial vehicle manufacturer in China, with more than US$4.77 billion in assets and 40,000 employees.

Santero will be the sole distributor from Sept 1, 2016 to Dec 31, 2019, with the option to extend for another 24 months.

In relation to the product range, KBES said it would leverage on Foton’s technology in electric vehicles, to develop electric buses for the domestic and regional markets.

KBES expects positive contribution from the vehicle assembly and sales division in future.

At closing, KBES remained flat at 27 sen, valuing it at RM34 million.